Administrations jump in Q3 as headwinds gather
Company administrations across Scotland jumped significantly in the third quarter of this year, as the economic headwinds gather pace.
Analysis of notices in The Gazette by Interpath Advisory found 14 companies based in Scotland fell into administration from July to September – up from 3 during April to June.
This mirrors the UK tally of 265 in the last quarter compare to 176 during the same period in 2021, and 243 in Q3 2020. However, administrations are yet to hit the pre-pandemic levels of 401 in Q3 2019.
August – traditionally the quietest month for insolvency appointments – saw the highest monthly number of administrations across the UK since March 2020, with 105.
The rising number of insolvencies can be seen across a wide range of sectors, with building and construction, industrial manufacturing, leisure and hospitality, retail, and the food and drink industry all witnessing increased activity.
Blair Nimmo, chief executive of Interpath Advisory, said: “The summer months often herald a quieter period for corporate insolvencies, and so the fact that August witnessed the highest monthly total in more than two years is particularly telling.
“We know that companies across Scotland have been wrestling with a myriad of issues for some time, from rampant inflation, to supply chain challenges, to labour shortages, so this is perhaps the first real evidence that a significant shift in restructuring activity is now underway.”
He added: “And let’s remember: the bulk of administrations seen in the past quarter landed well before the economic and political storm that we’ve witnessed in the past few weeks.
“The impact of rising interest rates, currency and gilt yield movements, and the increase in energy prices from 1 October are yet to feed through, but undoubtedly will only serve to compound the extraordinary pressure that businesses were already under.”